On Thursday, the Dow Jones Industrial Average reached a record-breaking milestone by surpassing 40,000 for the first time ever.
This is a big and meaningful achievement for the index that follows 30 of the most valuable companies that are traded on the stock market in the United States.
The Dow has increased by approximately 6% since the beginning of the year. At the end of trading on Thursday, the Dow Jones Industrial Average dropped below 40,000 points. The index ended the day at 39,869.38, showing a small decrease.
The recent increase in the Dow, S&P 500, and Nasdaq has been driven by data indicating that inflation is decreasing. This would give the Federal Reserve the opportunity to start implementing the anticipated interest rate cuts.
The inflation data released on Wednesday indicated that the rate at which prices are increasing has decreased slightly compared to the previous month. This marks the end of a period of high inflation that started at the beginning of 2024.
Also Read: Killer Whales Assault and Sink Another Vessel in the Straits of Gibraltar
Recently, the Fed has mostly given up on its previous prediction of three rate cuts of a quarter-point each for this year. However, the decrease in the rate at which prices are increasing gave hope for the revival of those plans.
“The combination of the Federal Reserve likely to be lowering interest rates because inflation is moderating with a resilient economy is a beautiful scenario for a bull market,” said Ed Yardeni, the president of market advisory firm Yardeni Research and a former chief investment strategist at Deutsche Bank’s U.S. equities division, in an interview with ABC News. Yardeni is also the former chief investment strategist at Deutsche Securities.
“It’s more enjoyable to say the market is going to these nice, round numbers in record-high territory than coming back down to them,” said Yardeni in conclusion.
The news about inflation that was released on Wednesday caused all of the main stock indexes to rise by more than five percent for the day, which resulted in all of them reaching new highs. The Dow Jones Industrial Average had risen by a quarter of a percentage point during the early trading hours of Thursday.
Many people believe that the rally in the stock market this year can also be related to the increase in value of a number of important technology companies, which has been driven mostly by the excitement surrounding artificial intelligence.
Leave a Reply